The house lost a huge amount of value (12.5%) which significantly downdrafted the net worth equation. Actively invested accounts are down about 3% year over year, which is pretty lame compared to the DJIA return of around 5%. The gains in net worth are primarily reflected from savings (and bond returns).

Our savings from income were around 6% of our total net worth. I wonder if it would be worthwhile to simply only invest in cash and very short term bonds, because if we are 36% shy of our investment goals, wouldn't it be prudent to simply wait 6 years with no risk and reach our goals, rather than pi$$ing money away in things that bring risk but not much return?

The only downside to this plan is that in the 6 years, when they end, what then? The cash has to go somewhere to generate a long term return. Presumably part of that is in dividend stocks. So theplan would run awry if the good dividend stocks crept up in the interim, making their future effective yield much lower.

I believe if we had been investing from 1980 through to 1990 rather than 2000 to 2010 we would be able to retire right now. Hmm..

We may be looking to buy a house this year, plausibly keeping the current one as a rental (the current one is owned outright). This will allow us to lose money in the housing market twice as fast. Alternatively, it will allow us to keep the current house out of the market for a few years, and potentially keep it as a diversification measure.

On the stock market front, the European debt problems seem to be making an ill wind for the year 2012, with a recession plausible, and another possible liquidity problem, both of which could hammer stocks, dividend plays and non dividends alike.

What is a poor investor to do?

Our budget is shot to heck, as we are hardly keeping track of it. That is, we don't really track anything at all. However, it seems many years of being on a budget have pretty much changed our purchasing behavior because the savings seem to still go up.

The wife's salary will drop substantially this year due to contract expirations.